SanDisk:
SanDisk comprises 0.35% of my portfolio. I took a starter kit last Spring, based on blowing winds related to digital cameras, MP3 players, and cell phones/PDAs ramping up compact flash memory.
We, here on this Thread, have always been a little fuzzy about how directly SanDisk benefits from its IPR, and exactly how strong and extensive its IPR is. Discussion on SanDisk, here, has been absent because we have been in a "wait and see" mode on this gorilla candidate.
Art B. from the SanDisk and Qcom threads has been a strong advocate for the company, but he now has fashioned a letter to the SNDK CEO trying to get some answers. I recommend that Gorilla hunters read his letter (especially points 1 & 2), because it is pertinent to SanDisk, but also because it asks the kinds of questions we all need to be asking about all of our gorilla candidates and gorillas-at-large. Apollo.
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To:Ausdauer who wrote (19311)
From: Art Bechhoefer Sunday, Feb 25, 2001 10:16 AM
Respond to of 19318
Letter to Eli Harari:
Dr. Eli Harari, President and CEO February 24, 2001
SanDisk Corp.
140 Caspian Court
Sunnyvale, CA 94089
Dear Dr. Harari:
I am a registered investment advisor and shareholder representing clients with approximately 80,000 shares of SanDisk. I have attempted to correspond with Frank Calderoni, concerning your most recent earnings report and conference call, but have been unable to obtain any responses to two fax communications and several phone calls over the past three weeks. I also requested information detailed below from Sharon Spehar, but she was unable to provide any specific answers.
Our concerns center around the following questions:
1. To what extent does SanDisk retain any patent rights capable of generating royalties and licensing fees? We understand that, as a result of numerous cross licensing agreements, large portions of flash memory devices produced by other domestic and overseas companies, though they may use SanDisk intellectual property, do not generate any royalties or other fees for SanDisk. We would like to know how much royalty and licensing fees were generated during each of the last four quarters, together with the sources (i.e., companies) of those fees.
2. Can you estimate how much flash memory revenue in the industry as a whole did NOT result in any royalties or other fees for SanDisk? Specifically, we are concerned about the extent to which competing compact flash products, MMC, or secure digital card revenues result in royalty payments. At the very least, we would like this data provided in percentage terms. Note also that we are concerned here with historic data of the sort that is, or should be reported routinely to shareholders and to the SEC, under the provisions of the Securities Act of 1934 and related laws. If the Sony MemoryStick uses SanDisk patents, we would also like to know if that product is generating any revenues from royalties and licensing fees.
3. Can you provide an update on progress on the health information cards under development with Kaneb? This topic was not discussed in the recent conference call. How close is this project to generating revenues?
4. Is there any truth to claims that competing compact flash cards have significantly faster write speeds than SanDisk? If so, has such performance adversely affected sales?
Finally, we desire to communicate with other SanDisk shareholders and would like to obtain from you a recent list of their names and addresses.
Very sincerely,
Arthur S. Bechhoefer |
